Opinion-Landlord bashing

LANDLORD BASHING

This is a popular support and  while it has focused on one group in particular its nothing  new to long established landlords in London.

A key issues is that residents complaints and withholding payment  is seen as and end in itself  on the misplaced belief that  it costs the LL money and profit  they wont pay their subcontractors  and he will have to sort it .

Thats wrong, yes it is- its an area full of misunderstanding.

1 Service charges are not the LL’s or Agents Money from which they

- take a profit and

- pay subcontractors

- and accept the costs and risks of non payment

The SC money is held on trust separate to the landlords money and payments made out of it  are to the various trades and services inc the Agents Fees or landlords costs .

2 Leases state in most cases that the provision of services are conditional on  payment on account by the leaseholder. Not as some would like “ I don’t pay for the meal until I have eaten it”

3 Non payment is not simply the LL/Agents fault or problem as bad debt are apart of every companies cash flow. Its important to understand that skulduggery aside  there is no profit or contingency element in SC or Fees to do so because the of the limitation on those costs  both contractually and under section 19 “fair and reasonable”.

While the landlord does still have  the responsibility to provide services where there is non payment then the standard and frequency of services is adjusted often far short of what is expected.

Funds are used to pay for insurance and utilities and gardening and cleaning less frequent and repairs on Health and Safety basis only..

The inevitable effect of a stand off is that the cycle of falling standards and trust arises to the detriment of all, as it is usually resolved with punitive legal costs visited on those that haven’t paid and DCA contact with your mortgagee.

Having understood this it is vital to understand that both owner and LL have a role to play in dealing with the cycle.

Owners should avoid wallowing in the problems and feasting on outrage, diverting that instead to identifying and  resolving the issues. In the main agents and LL’s are realistic  about such matters and where the wheels have fallen off its important to look at whether nuclear options are need or a problems negotiated.

Negotiated settlements can include

- listing and prioritising matters to be done

-understanding how much is outstanding

-stage payments to allow funding for chasing the non payers and dealing with the list

Mediators are very useful in achieving this

Consider -separating some issues that need to be resolved and not creating road blocks at the cost of  immediate progress allowing those to be determined later or by mediation or Tribunal hearing.

Where this cannot work anger and frustration is better channelled into the nuclear options of independent managers RTM RTE or Compulsory Acquisition